Sparks fly over Houston County wheel tax proceeds

ERIN, Tenn. — County Commissioner Howard Spurgeon accused Houston County Mayor George Clark of “misuse of county funds,” in what became a shouting match over wheel tax proceeds during the March 19 County Commission meeting.

Before adjourning the meeting, Commissioner Randal French asked if wheel tax money, which commissioners increased by $25 in June, was being allocated to the county’s General Fund.

Clark said the 2017-2018 Budget, which commissioners approved in August, shows the wheel tax money going to the Debt Service Fund, but he discovered the money was being directed to the General Fund by the county Trustee.

The mayor said he consulted with County Attorney Markley Runyon, who advised that because the wheel tax resolution states proceeds would go into the General Fund, it needed to be amended to direct the money to Debt Service, from which the county pays its debts.

Commissioners passed the resolution during the Jan. 22 meeting, from which Spurgeon was absent.

“If you move it to the General Fund, then you’re going to have a problem in Debt Service” of being short to make debt payments, Clark told commissioners.

He said later he doesn't know why the budget shows wheel tax proceeds going to Debt Service rather than the General Fund as the resolution directs. He noted, however, that the preceding $45 wheel tax always went to Debt Service prior to the increase.

The county mayor contended he caught the error and moved to correct it. Spurgeon and some other commissioners countered that the wheel tax increase was intended to cover the raises for sheriff’s deputies and Emergency Medical Service employees, which are paid from the county’s General Fund.

“You’ve made us all liars,” Spurgeon told Clark because the increase was promoted to the community to cover the raises.

The discussion escalated with Clark saying he would direct the wheel tax money to the whichever fund commissioners wanted, but where would money come from to replace it.

Changing numbers

Spurgeon, who is chairman of the Budget Committee, accused Clark of changing numbers in the budget between what the committee approved and what the full commission approved.

“That’s my fault (as Budget Committee chairman) because I didn’t go through it and look at it line by line,” he said after the meeting. “I should have. I have since been advised that there were changes made, and we cannot trust what we get back.”

Spurgeon declined to say who told him of the changes.

“I don’t change numbers,” Clark said after the meeting. “It’s a (budgeting) process. And I’ve been doing the same process for many years. Why would I change numbers? It’s not anything to me.”

Further, Clark told Spurgeon and other commissioners any discrepancies would show up in the county’s audit by the state.

George Clark(Photo: File photo)

“Yes, I called the state auditors and asked them to redo it,” Spurgeon responded.

“The audit?” Clark shot back. “You’re smarter that the state auditors, I guess.”

John Dunn, of the state Comptroller’s Office, confirmed Tuesday an email from Spurgeon was received in February, “requesting that we examine wheel tax revenue allocations.”

Dunn said in an email response, the wheel tax was passed for the fiscal year 2018 budget, and “our most recent audit of Houston County covers fiscal year 2017. We will review the wheel tax as part of next year's audit.”

Hospital factor

Spurgeon asserted that Clark wanted the wheel tax money to go to Debt Service in order to make payments on the county-owned hospital, since the facility is “still losing $1.5 million a year,” and “that’s where he’s got the biggest debt.”

Clark said the hospital is not the issue regarding where wheel tax proceeds are directed.

After purchasing the financially troubled hospital in 2013 to keep the doors open, county commissioners approved a 60-cent tax increase in 2014 to shore up the business, which essentially started anew, until it can become financially self-sufficient.

The resulting $750,000 from the tax increase is set aside in a fund for hospital operations.

In 2016, commissioners decided Houston County Community Hospital should pay its debt for the hospital purchase, so $446,000 of the total is directed to Debt Service for that purpose.

“They (hospital) can’t pay their debt (directly), it has to come from Debt Service,” Clark said.

Spurgeon and Clark traded personal barbs during the meeting, and each say the other dislikes them.

“It’s political,” said Clark, who is running for re-election. “He wanted to make a point of it.”

Spurgeon, who also is running for re-election as commissioner, questioned Clark’s leadership.

“I just don’t trust him anymore, point blank,” he said.

Mark Hicks can be reached at 931-212-7626 or on Twitter: @markhicksleaf.